Life of Guangzhou - Worst over for China's Export Hub-Guangdong Chief

The worst is over for China's export engine of Guangdong, which was devastated by the financial crisis, amid hopeful signs of rising investment, exports and 1.2 million new jobs, its governor said on Thursday.

Guangdong, which encompasses the "world factory" of the Pearl River Delta, was hit by mass factory closures and lay-offs as the global downturn shrank the orders from Western consumers that are the export-oriented region's lifeblood.

Since then, however, with China's talismanic nationwide economic growth target of 8 percent seen to be in the bag, and export declines having reversed, Guangdong's economic outlook has steadily improved.

"To put it short, the worst is over," Guangdong's governor Huang Huahua told reporters during a major economic conference in the provincial capital Guangzhou.

Huang said 1.23 million jobs had been created in Guangdong between January and October, with scattered signs of labour shortages in some Delta factory towns as Christmas orders have picked up from Western customers.

"The employment market has essentially stabilised, while rural and urban residents' wages have steadily increased," he said.

MIGRANT WORKERS

Huang said Guangdong's new job tally represented one-sixth of China's overall total for the same period, working out to around 7.4 million new jobs nationwide. If accurate, this would mean nearly a third of the estimated 23 million migrant workers who were laid off in China due to the crisis have found work again.

Some economists, however, said the figure needed to be considered in a broader context.

"It's not telling you about job destruction, and it's not telling you to what extent those jobs have come about merely from stimulus money," said Stephen Green, a China economist for Standard Chartered Bank, referring to China's nationwide stimulus package of 4 trillion yuan .

"There are still some serious problems in the export economy," Green added, pointing out that while factory output surged to a 19-month high in October, overall exports in October were still down 13.8 percent year-on-year.

Huang reiterated that Guangdong, which churns out around a third of China's overall exports, would likely hit overall GDP growth this year of more than 9 percent. "The drop in our foreign trade has been narrowed. For the first three quarters the foreign trade has witnessed a drop of 16.8 percent, which is 3.1 percent less than the national average. This was a very hard task to achieve."

Meanwhile, with the Christmas season approaching, there have been signs of surprisingly robust and increasing demand for Chinese goods in its major trade partner of the United States.

An executive for U.S. toy giant Mattel <MAT.O> who spoke on condition of anonymity, said exporters were now air-freighting toys and other goods at great cost to meet rush orders from major U.S. retailers like Wal-mart, who have been facing stock shortfalls, with earlier shipments of goods having been overly conservative.

[More Guangdong and Pan PRD News]